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Transmission's True Value

Adding up the benefits of infrastructure investments.

Fortnightly Magazine - February 2012

benefit).

6. Pioneer Transmission, Formula Rate and Incentive Rate Filing, FERC Docket No. ER09-75, at p. 7 (January, 26, 2009). These benefits include both the energy and capacity value of reduced losses.

7. SSGWI Transmission Report for WECC, October 2003.

8. For a more detailed discussion of the benefits listed in Table 8 see, for example, Pfeifenberger, “Transmission Planning: Economic vs. Reliability Projects,” EUCI Conference, Chicago, Oct. 13, 2010.

9. For example, see California ISO, Transmission Economic Assessment Methodology (TEAM), June 2004.

10. Federal Energy Regulatory Commission, 2011 Performance Metrics for Independent System Operators and Regional Transmission Organizations , Appendix F: ISO New England, April 7, 2011, p. 106.

11. Before the Arizona Power Plant and Transmission Line Siting Committee, Docket No. L-00000A-06-0295-00130, Case No. 130, Oral Testimony on behalf of Southern California Edison Co. re: economic impacts of the proposed Devers-Palo Verde No. 2 transmission line, September and October, 2006, p. 39.

12. Id., pp. 30-32. This reliability cost can be thought of as: (expected unserved energy) x (value of lost load).

13. Examples are out-of-merit dispatch costs, reliability-must-run costs, and reliability unit commitment costs (referred to with acronyms such as RMR, MLCC, RSG).

14. Professor Frank Wolak, as quoted in California ISO, Transmission Economic Assessment Methodology , June 2004, p. ES-9.

15. American Transmission Co., LLC, Planning Analysis of the Paddock-Rockdale Project , April 5, 2007, pp. 4 (project cost) and 50-53 (insurance benefit).

16. For example, see Wind Energy Transmission Economics , prepared for WPPI Energy by Burns and McDonnell, March 2010, page 1-2, Figure 2.

17. For example, Brattle Group experts estimated that emerging environmental regulations likely will result in the retirement of over 50,000 MW of coal-fired generation, with much of it located in the Midwest and Texas. (Celebi et al., Potential Coal Plant Retirements Under Emerging Environmental Regulations , The Brattle Group, Dec. 8, 2010.)

18. Based on Brattle analysis of CAISO, Economic Evaluation of the Palo Verde-Devers Line No. 2 (PVD2), Feb. 24, 2005; and American Transmission Co., Planning Analysis of the Paddock-Rockdale Project , April 2007.

19. National Renewable Energy Laboratory, Eastern Wind Integration and Transmission Study (EWITS), January 2010, p. 203. 23 percent is the average across a range of 19 percent to 27 percent and 28 percent is the average across a range of 26 percent to 30 percent for the existing and overlay results, respectively.

20. Id., estimating renewable generation balancing costs after regional transmission upgrades on p. 46 (in 2009 dollars) and p. 163 (in 2024 dollars). See also U.S. Department of Energy, 2009 Wind Technologies Market Report , August 2010, p. 65, reporting renewable integration balancing costs from various studies ranging from $2/MWh to $8/MWh.

21. Public Service Commission of Wisconsin order in Docket 5-EI-141, filed Oct. 10, 2008, p. 5. Two other changes that contributed to this decision were the introduction of the Midwest ISO as a security constrained, independent dispatcher of electricity and the development of additional generation in the state.

22. California ISO, Transmission Economic Assessment Methodology , June 2004, p. 9-21. Tehachapi region